The International Air Transport Association (IATA) is teaming up with a company to develop a carbon exchange platform where airlines, and passengers, can purchase offsets aimed at reducing the impact of air travel on the environment.
The deal with Xpansiv CBL Holding Group (XCHG), a commodity exchange company, will provide a common marketplace called Aviation Carbon Exchange for eligible emission units, the two organisations said in a joint statement on Thursday.
International airlines are counting on a global carbon offsetting plan to cap CO2 emissions from air travel at 2020 levels, mitigating the environmental impact of flying even as passenger traffic is forecast to grow.
The plan, known as Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), is the first of its kind for a single industry in response to climate change.
In response to climate change,
“We expect airlines from all over the world to participate,” XCHG President and Chief Operating Officer John Melby, who has worked with individual airlines and carbon markets, told Reuters.
Commercial aviation is responsible for 2% of global carbon emissions and has been facing an expanding backlash in Europe where a Swedish-born “flight shaming” movement has taken hold.
Participating commercial airlines aspire to replace conventional fuel with more sustainable biofuels in order to achieve a carbon-neutral growth after 2020. However, with biofuel proving to be more costly and in limited quantity, emissions may be offset by purchasing carbon credits from designated environmental projects around the world
Those credits will be offered on the exchange, which enters a pilot phase in the current quarter. It will be powered by XCHG’s CBL Markets with real-time data, and airlines will pay a fee for each transaction.
The International Civil Aviation Organisation, the UN agency that ratified CORSIA, will determine which offsets from different environmental projects will be offered on the exchange.
CORSIA is expected to provide more than $40 billion in funding for climate projects, and offset 2.6 billion tonnes of C02 emissions between 2021 and 2035.
Commercial airlines have also sought to cut down on their carbon impact by using more fuel-efficient aircraft and finding more direct flight paths through improved air traffic control.
IATA represents some 290 airlines comprising 82% of global air traffic.
By Tracy Rucinski, Sourced Reuters
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